06/12/2018 | Press release | Distributed by Public on 06/12/2018 13:37
WASHINGTON-Rep. Keith Ellison (D-MN) today introduced the Reward Work Act, which would prevent companies from buying back their own stocks on the open market and require that workers have a voice on corporate boards:
'Large corporations have used their recent tax break to close plants and offshore jobs, all while spending record billions on buybacks to enrich their own executives,' Rep. Ellison said. 'Workers deserve a larger share of the profits they produce and a seat at the table, and this law will make sure they get it.'
After the passage of the Republican tax bill, S&P 500 companies are on track to spend a record $800 billion on buybacks in 2018. In addition to giving workers at publicly-traded companies the right to elect one-third of their board membership, the Reward Work Act would ban companies from buying back their own stock except through the use of tender offers, which are subject to more disclosure requirements than open-market purchases.
When Republicans passed legislation earlier this year cutting taxes on corporations and the wealthy, they claimed it would help middle-class taxpayers who invest in stocks through retirement accounts. In reality, almost half of American households have no retirement savings at all, and the wealthiest 10% of households own 84% of all stocks. These wealthy households are the beneficiaries of the recent surge in buybacks.
As one example, Walmart recently announced $20 billion in stock buybacks. The company minimum wage is $11, below the federal poverty line for a family of three. If the company were not delivering $20 billion to shareholders and instead invested that money in workers, it could raise wages $5.66 an hour to a base wage in excess of $16 an hour.
Rep. Ro Khanna (D-CA) will be an original cosponsor of the Reward Work Act. The Senate version of the bill was introduced by Sen. Tammy Baldwin (D-WI) in March 2018 and is cosponsored by Sens. Elizabeth Warren (D-MA), Brian Schatz (D-HI) and Kirsten Gillibrand (D-NY).